Insurance for learners: an expensive lesson

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Getting cover for a 17-year-old is a minefield, so make sure you do your homework

Horror stories abound from parents and their offspring talking about £3,000 insurance on £300 cars as sons and daughters learn to drive once they have turned 17.

My daughter will start that process within a year, so to prepare for the worst I pretended she had just turned 17 and input her details to some insurance comparison websites. Initially, things weren’t as bad as I’d feared.

My daughter will start learning to drive in a year-old VW Polo. For the privilege of accompanying her, adding her to my existing cover doubles the premium. According to insurers, young drivers taking to the road alone represent a significantly greater risk than if they’re accompanied.

If my daughter wants to go solo, the premium rises to about £800. The effect of the car on the premium appears fairly random. A few years ago, the Association of British Insurers (ABI) told me that young drivers will be stung if their car has a 1.6-litre engine or larger. But Erik Nelson from Aviva told me this week: “Engine size does not play any part in determining the insurance group. Engines are becoming smaller, but in many cases more powerful. Instead of engine capacity or power, the actual performance of the car is used as one of the factors to determine the group rating.”

Bearing that in mind, I input details of various cars that would suit our needs. If my daughter learns in a 75bhp Skoda Fabia 1.0, it would be £42 cheaper than a Fabia with the 90bhp 1.2 TSI engine – or about £3 per bhp. A Polo 1.2 TSI would be £80 more expensive than the smaller-engined Fabia.

It’s a different story once she’s passed her test. Discounting the Fabia 1.0 (the saving wasn’t enough to warrant the smaller engine) the real difference comes between the Skoda and VW, in 1.2 TSI guise. To include her as a named driver increases the cost of the Fabia to £874 – but on the mechanically identical Polo it rises to £722. Why?

Sarah Cordey from the ABI explained: “Where a premium is higher for one type of vehicle than another it will likely be because insurers’ claims history shows that vehicle is either more likely to be involved in a claim, or the claim is likely to be for a higher value.

“Insurers take different things into account when setting premiums, so it’s always worth shopping around.” The lesson I’ve taken from this is that in the world of insurance you can’t take anything for granted.

Floody hell for buyers

Buying a flood-damaged car could be a very real danger for thousands of drivers. Insurance companies have paid out £26 million on the 3,600 cars damaged by flooding after storms between December 3 and January 3.

Flood-damaged cars can be repaired, but it has to be done properlyCredit:
AFP

However, according to breakdown firm Green Flag, only one in seven of the cars it has rescued are insurance write-offs. That means six of those cars are dried out and put back on the road.

It would be easy if the story ended there. But a repairer who works for insurers told me that they have been known to send a car to be dried out and sometimes nothing more, so it might be left with a musty smell for the rest of its life. Drying out a car that’s been submerged in water is a complex business. Even if there’s no mechanical damage, it could have suffered electrical harm. And if sensors hidden beneath the floor for the airbags have survived unscathed, the catalytic converter could have suffered damage.

Buying a flood-damaged car – perhaps inadvertently – could be a very expensive exercise indeed.

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